Perhaps nothing so well illustrates investors’ gullibility than their reactions to spam emails that hype penny stocks: Some actually invest in them.

Most of us, of course, insist that we’re not that gullible. We complain about how these spam emails are nuisances at best and try to program our spam filters to prevent them from ever showing up in our inboxes.

Apparently, however, at least some of us can’t resist trying to take advantage of the hundreds, if not thousands, of percentage gains that these emails promise. A number of academic studies have documented that touted stocks’ trading volumes rise significantly in the wake of a spam email campaign, and then just as quickly fall back again in the days thereafter… Read Full Article